Majlinda Kelmendi, who will compete at the London 2012 Olympics for Albania. Photograph: Visar Kryeziu/AP

Kosovo's best medal hope, judo champion Majlinda Kelmendi, has said she will compete at the Games for Albania after the International Olympic Committee ruled that she could not enter as an independent under the Olympic flag.

The decision came as the IOC also ruled out the idea of female Saudi athletes competing under the Olympic flag as a way of circumventing opposition within the kingdom to their presence in a Saudi team.

Kosovo's independence is recognised by 80 countries including the UK but not by the UN or the IOC. The sports minister of the former Yugoslav province, Memli Krasniqi, said Kelmendi and Kosovo had been treated unfairly, and compared their case with the invitation to Yugoslav athletes to compete under the Olympic banner at the Barcelona Olympics in 1992, when the Serbian leadership in Belgrade was under international sanctions for its participation in war crimes.

"It is an extremely disappointing development and contrary to the values enshrined in the Olympic charter," Krasniqi said.

"There are no good reasons to turn down a genuine request by an athlete who is among the best in the world. Kosovo sport has been suffering from this isolation for 20 years and we have athletes who have been forced to leave in disillusion to compete for other countries."

The minister said it was ironic that a Yugoslav team had been allowed to compete in Barcelona despite international sanctions imposed because of the role of the then leader, Slobodan Milosevic, in orchestrating crimes against humanity. Kosovo was one of the targets of Milosevic's ethnic cleansing campaigns and 10,000 Kosovans were killed before Nato intervention forced Milosevic to withdraw his troops in 1999.

"In Barcelona, when Yugoslavia under Milosevic was under heavy sanctions, the IOC was so humane it invited athletes from Yugoslavia to compete. We would love to have similar treatment for our athletes," Krasniqi said.

Kelmendi is the fifth ranked judoka in the world in the under-52kg class, and won three Grand Prix and World Cup events last year. She has both Kosovo and Albanian citizenships and had hoped to represent Kosovo for the first time in London.

The decision on her participation came at an IOC meeting in Quebec City, Canada, which also saw the organisation's president, Jacques Rogge, rule out Saudi women competing under a neutral flag. "There is absolutely no need to consider the possibility of the participation of Saudi women under the IOC flag," he said.

Saudi Arabia is one of three countries to never include women in their Olympic teams. The others, Qatar and Brunei, plan to bring female athletes to London but the Saudis appear unwilling, an attitude which has brought criticism from human rights groups and others. "It's not an easy situation," Rogge said of talks with Saudi officials on the issue. "There is a commitment. We're working steadily with them to find a good solution."

David Mepham, UK director of Human Rights Watch (HRW), which has called for tough IOC action over the Saudi team, said the group was worried at the seeming impasse. He said: "It's looking unlikely now that the Saudis will include women in their team for the London Games, which is a great concern for us."

HRW is calling for the IOC to bar Saudi Arabia from London unless it takes steps beyond just including women in the Olympic squad, Mepham said: "We also want them to take steps back in Saudi Arabia to ensure that women and girls can participate meaingfully in sport. We've documented the systematic discrimination which really prevents this – there are a few private gyms, but essentially women and girls are not allowed to participate in sport."